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Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas.

stimulating. and converting the purchasing power of rural consumers into an effective demand for specific products and services and moving these products and services to the people in rural areas to create satisfaction and a better standard of living and thereby achieving organizational goals.What is Rural Marketing? “Rural Marketing can be defined as a function that manages all activities involved in assessing.” .


Evolution of Rural Marketing Phase Origin Function Major Products Agricultural produce Agricultural inputs Source Market Rural Destination Market Urban I Since independence Mid-Sixties Agricultural marketing Marketing of agricultural inputs Rural marketing II Urban Rural III Mid-Nineties Consumables and durables for consumption and production All products & services Urban/ Rural Rural IV 21st Century Developmental marketing Urban & Rural Urban & rural .

• Major Income of Rural consumers is from Agriculture. • Standard of living & rising disposable income of the rural customers. • Traditional outlook • Rising literacy level • Diverse socioeconomic background • Infrastructure Facility . Diverse and Scattered Market.Nature of Rural Marketing • Large.

Communication.. Individuals. Durables Watches. Panchayat office etc. House holds. Fertilizers. Fishnets. Husbandry cottage industries. Tractors. and Production firms Consumables: Seeds. Harvesters. Animal feed. Cooperatives. T. Health Centre. ------- Services Market ------- ------- Repairs. Officers.V. Generators. Pump sets. Power etc. Animal. Textiles and Garments. Fishing. Kitchen appliances. Pesticides. Medicines. Radio. Cosmetics. Bicycles. Toiletries. Sewing machines. Foot Wear etc. Education. Poultry farming. Banking. School. . Credit.Taxonomy of Rural Markets (Classification of Rural Markets) Constituents Consumer Market Individuals and households Products Consumables: Foods products. Boats etc. Transport. Petrol/Diesel etc. Two Wheelers etc. Insurance Health care. Tillers. Furniture. Services ------- Industrial Market Agricultural and allied activities.

6 2.4 44.000 Rs.000 Rs.1 37.8 4. 25000 & below 1994-95 1.Whether Rural Markets are Attractive? • Large population • Rising prosperity INCOME GROUP Above Rs.4 2006-07 5.8 22.001-77000 25001-50000 Rs.0 41.0 61.2 • Growth in consumption • Life-style changes • Market growth rates higher than Urban • Rural marketing is not expensive .7 8.50.3 26.6 22.4 2000-01 3. 77001-100.6 5. 100.7 13.

.Rural vs Urban Market Characteristics Comparison Factors Purchase period Urban Festivals & auspicious occasions Trust international brands more Rural Harvesting season=> Low loan pay back ability Trusts domestic brands more=> Because of low awareness & information Brand awareness Household size 3. Print Credit vs.8 members=> Low disposable income Haats & melas. cash purchase High credit purchase Market GrowthEx – consumer durable 7-10% annual growth .4 members 4. mandis and word-of-mouth High cash purchase=> Limited retail finance availability & seasonal income pattern (72 million Kisan Credit Card) 25% annual growth Channel of communication TV.

C TVs (R). Scooters. B and W TV (R) . 2-in-1 (stereo). Mixer/grinders . Mopeds. Instant Geyser. VCRs/ VCPs. Wrist watches (quartz) . Electric irons. Wrist watches (mechanical). Product • Category I – These products are of immediate use to the family Pressure Cookers. Storage Geysers. Sewing Machines. B and W TV (S). Ceiling Fans • Category II. Bicycles • Category III.The 4Ps Of Rural Marketing 1. Table Fans. Refrigerators. Mono Cassette Record.Radio/Transistors . Motor Cycles. Vacuum Cleaners. Washing Machines.These are combination of means to supplement income. Pressure Pans. C TVs (S). 2-in-1 (mono).These products reduce the strain of the households and also act as a source of entertainment.

pump sets. Pricing • For example banks offer loans for tractors. television sets and so on to make the product affordable to a rural consumer. • Smaller unit packs are preferred in the case of FMCG products to offer at lower prices. .2.

Placement or Distribution  A three tier rural warehousing setup exists: • CWC/SWCs (Central/ State Warehousing Corporation) • Co-operatives • Rural Godowns Retailers in rural markets .3.

Promotion  Rural communication can be through Conventional media or through a nonconventional media. Melas and through influential person in the area. • Conventional media: Print. Haats. Cinema. Posters. Television and Print. street plays. • Non-conventional media: Theatre.4. .

. LG Electronics . finding them is not easy. 700 million Indians may live in rural areas. • Marketers must trade off the distribution cost with incremental market penetration. • Eg. 00. • Marketer should plan accordingly and strive to reach these markets on a regular basis.000 villages are spread over 3.The 4As of Rural Marketing Availability • 7. Coca-Cola.2 million sq km. They are highly dispersed. India's largest MNC Hindustan Lever. it is a greater challenge to regularly reach products to the far-flung villages. • Given the poor infrastructure.

Most of the shampoos are available in smaller packs. • Fair and lovely was launched in a smaller pack. Lifebuoy. • Godrej recently introduced three brands of Cinthol.Affordability • With low disposable incomes. . products need to be affordable to the rural consumer. Fair Glow and Godrej in 50. most of who are on daily wages. • Coca-Cola has addressed the affordability issue by introducing the smaller bottle priced at Rs 5. The initiative has paid off: 80% of new drinkers now come from the rural markets. • A solution to this has been introduction of unit packs by some companies. • Hindustan Lever has launched a variant of its largest selling soap brand. • Some product also can be made affordable by making available the loan facility by having alliance with packs.

. It was a runway hit selling 100. • HDFC Standard LIFE topped private insurers by selling policies in rural sector. It also provided a tin box for new outlets and thermocol box for seasonal outlets. • LG Electronics have developed a customized TV for the rural market named Sampoorna.000 sets in the very first year. • Coca-Cola provided low-cost ice boxes in the rural areas due to the lack of electricity and refrigerators.Acceptability • There is a need to offer products that suit the rural market. The company tied up with non-governmental organizations and offered reasonably-priced policies in the nature of group insurance covers.

• E. Consumption of branded products is treated as a special treat or indulgence.g. LG Electronics . two out of five Indians are unreached by any media . the rural consumer expressions differ from his urban counterpart. Godrej Consumer Products. Press. • The media penetration in rural areas is only about 57%. Coca-Cola. Radio and Cinema put together. Philips . Hindustan Lever . mandis and melas are opportunities. For a rural consumer. • Haats.TV. • However. • Haats. Family is the key unit of identity for both the urban and rural consumer. mandis and melas are the place of opportunities to promote awareness about the product. outing is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan.Awareness • A large part of rural India is inaccessible to conventional advertising media.It has been seen that.


FMCG • FMCG companies have realized a significant proportion of their sales from rural markets. • Presently rural India accounts for 34% in FMCG consumption. tea and wrist watch consumption. bicycles. Chik Shampoos sold in sachets priced at 50 paisa and 500gm . fans. • Ex. • They account for 70% of toilet soap and 50% of TV. Parle-G priced at Rs. • HUL has launched special initiatives to push its rural sales through “Project Shakti” and “Shakti Amma” television channel • Successful FMCG products have typically been low priced and available in small-unit packages. 2.

• Large format retail stores called “Adhaar” also have been set up by Godrej Agrovet. • ITC’s Choupal Sagar. • Hariyali Kissan Bazar. or around 40 per cent of the Indian retail market. .RETAIL • The rural retail market is currently estimated at US$ 112 billion. promoted by DCM.

has registered almost a fifth of its sales from the non-metro areas across the country • Mahindra & Mahindra is now selling more Scorpios in rural and semi-urban markets.AUTOMOBILES • Rural areas have traditionally been major markets for automobiles such as tractors and cars • Market leader in the small car segment. . • Another entrant is Toyota Kirloskar Motor. Maruti Suzuki India Limited.which is planning to sell 40% of its cars in rural markets in India.

.CONSUMER DURABLES • Many companies are committed to modify their products to explicitly suit rural demands • For example. lighting solutions company BPL Techno Vision has launched its rechargeable light emitting diode (LED) lantern 'BPL Chirag' for the domestic rural market.

80000 villages in with 45000 women entrepreneurs and generating Rs 700 – 1000 per Month to each women. partnership with self help groups of rural women and covers 5000 villages in 52 districts in different states. • Micro enterprises opportunities for rural women. • Providing health and hygiene education through shaktivani program. .Rural marketing strategies adopted by stated business houses  HUL • Project Shakti. • Ishakti portal: Shakti has already been extended to about 15 states.

.Hero Motocorp Ltd: • To strengthen their network in rural areas the company started sales. DRAMAS to give some special message and attract the crowd & • advertise its products. • The company conducts SKITS. servicing & spare parts outlets in small towns & villages across India. • The most successful product is Splendor in rural market and the company kept on focusing on upgrading and models so then they later came up with splendor Plus & Splendor NXG which provided extra features and the customers are satisfied.

This scheme increased Maruti sales by 16600 units. .Maruti Suzuki India Limited • Ghar Ghar Me Maruti: Mera Sapna Meri Maruti” is targeted at the customer segment consisting of village panchayat members who are highly influential and respected in rural areas and nearby towns.